The international community has taken note that Mexico may be taking various steps to distance itself from the Chinese Communist Party.
Many signs in Mexico reflect this. The upcoming bilateral trade negotiations between Mexico and the United States, Washington’s clear anti-Communist stance, the nearing election season, Mexico’s concerns about its trade deficit with China, and the increasing stringency of US regulations on importing Chinese automobiles and components are all prompting Mexican politicians to reconsider their commercial cooperation with the world’s second-largest economy.
Sometimes, one’s stance follows trade, rather than the other way around. If trade moves away from China, the stance may also move away from the CCP.
The new Mexican government now claims it aims to reduce imports from China and other Asian countries. An article by The Wall Street Journal titled “Mexico Wants to Curb Chinese Imports With Help From U.S. Companies” published on October 8, 2024, reported that the Mexican government is informally discussing with American businesses how to develop industrial capability in Mexico to produce materials domestically to replace those previously imported from China.
Luis Rosendo Gutiérrez, the Deputy Minister of Trade of Mexico, interviewed by The Wall Street Journal, stated that Mexico is seeking assistance from major American companies to help develop industrial capabilities in Mexico, covering sectors such as automobiles, semiconductors, aerospace, and electronics, to be able to produce products as substitutes for those imported from China, Taiwan, Vietnam, and Malaysia.
A Reuters article titled “Biden’s new China tariff wall faces leakage via Mexico, Vietnam,” published on May 14, 2024, indicated that Vietnam and Mexico are reportedly helping China evade US tariffs by transshipment, repackaging, and incorporating materials like automotive components into their assembled export products.
In 2022 and 2023, Chinese businesses invested over $14 billion in Mexico. In an article by Reuters titled “Chinese EV maker BYD eyes state incentives for Mexico plant” from August 21, 2024, it was reported that Chinese electric vehicle manufacturer BYD is seeking to build a complete car factory in Mexico. Some US politicians have taken notice of this and may introduce legislation to impose tariffs on these cars equal to those from China.
In July of this year, Mexican Finance Minister Rogelio Ramírez de la O addressed the issue of excessive imports from China. He remarked, “We only buy and don’t sell; this is not a normal commercial state of affairs. Mexico, like North America, needs to produce more products for consumption because our households overly rely on basic goods from China.”
Ramírez highlighted that Mexico imports goods worth $119 billion from China annually, while the total value of exports to China is only $11 billion.
In June, Claudia Sheinbaum was elected as the new President of Mexico, becoming the country’s first female president in history. She has announced to retain Ramírez in his position. A month later, Ramírez made remarks criticizing the CCP, which was certainly not a coincidence.
It is noteworthy that the previous Mexican President Andrés Manuel López Obrador led a government that was overly friendly with Beijing and other authoritarian regimes, which displeased Washington due to non-cooperation on issues such as illegal immigration and the fentanyl crisis.
Sheinbaum is sometimes portrayed as a loyal supporter of her predecessor Obrador’s policies, continuing the friendly stance towards authoritarian countries. For instance, her invitation to Russian President Vladimir Putin and Venezuelan President Nicolás Maduro to her inauguration ceremony drew attention from Washington, although ultimately both leaders did not attend. Mexico’s recent criticisms on trade relations with China indicate that Mexico is taking a new stance, at least towards China’s CCP.
The US is increasing pressure on Mexico to further distance itself from the Chinese regime. In the 2025 US-Mexico trade negotiations, the US might stipulate a minimum percentage of North American content in imported products before granting them duty-free treatment.
On October 4, Senator Sherrod Brown’s office released a press release stating that Brown and other US lawmakers urge Mexico to “address the security threats posed by Chinese networked vehicles.” The press release warned that these vehicles could “collect a range of sensitive information, including sensor data and images, biometric data such as fingerprints and recordings, vehicle location, financial information, and vehicle information.”
Some believe that in extreme situations, such as a war erupting between China and the US over Taiwan, vehicles imported from China could be vulnerable to CCP hackers triggering destructive actions remotely. CCP hackers have implanted malicious software in US critical infrastructure like water and power facilities, posing significant risks.
Furthermore, the CCP regime has failed to fully cooperate with US drug investigations targeting deadly fentanyl producers exporting precursor chemicals to Mexico. All signs point to the real intent of the CCP to harm the US.
To mitigate the latest risks, the US Department of Commerce announced a proposed rule in September to ban the import of electronic components for controlling autonomous driving and vehicle connectivity produced in China and Russia.
Considering the impact of US national security policy on Mexico, Mexico should anticipate upcoming US laws aimed at the CCP and maintain distance from the CCP and other authoritarian regimes. Americans are working to disentangle the US strategic supply line from China, and this should also apply to Chinese products transshipped through the US-Mexico border. The new Mexican government is faced with a choice. Let us encourage them to make the right decision.